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As of 22:48 22 Oct 2018
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Sainsbury's-Asda probe to look at impact of Aldi and Lidl

Asda Sainsbury's logos
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The competition probe into the planned merger of Sainsbury's and Asda will look at the impact of newer rivals in the grocery sector, including Aldi and Lidl.

The Competition and Markets Authority (CMA) said it would consider how the rapidly-growing budget retailers are affecting competition in the sector.

Other key areas the watchdog is set to scrutinise will be the dominance of Sainsbury's and Asda in grocery sales, both in-store and online, fuel sales and other items such as toys, small electrical goods and children’s clothing.

The CMA will also "assess whether the merger could lead to a worse outcome for shoppers through higher prices, a poorer shopping experience, or reductions in the range or quality of products offered".

What, no Aldi and Lidl?

Emma Simpson

Business correspondent, BBC News

Asda and Sainsbury stores

So what to make of the initial findings from the Competition and Markets Authority?

The competition watchdog has found 463 local areas where it believes there is a "realistic prospect of a substantial lessening of competition".

It’s used traditional methodology to look at how these two businesses – excluding convenience stores – overlap in individual catchment areas.

Crucially, this process excluded rivals like Aldi and Lidl: these two chains now account for a whopping 13% of the UK grocery market, and are continuing to grow.

The real test is what weighting, if any, the CMA gives to these discounters and other rivals when they really get stuck into vetting this mega-merger.

We should get some more detail on how they’ll approach this in the next few weeks. The CMA says the fact that the parties’ stores overlap in 463 local areas shouldn’t be viewed as a starting point.

But this very large number certainly highlights just why this controversial tie-up is being heavily scrutinised.

Watchdog outlines supermarket merger concerns

Asda and Sainbury's signs
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The Competition and Markets Authority (CMA) has published its findings from its initial phase 1 investigation into the proposed merger between Sainsbury's and Asda and has found 463 local areas where it believes there is a "realistic prospect of a substantial lessening of competition".

The merger of the UK's second and third largest supermarkets will now undergo a phase 2 CMA investigation which is a more in-depth look at areas such as where stores overlap, if shoppers could face higher prices or a worse quality of service.

For background on the issues the CMA must examine in relation to the Sainsbury's and Asda merger read BBC business correspondent Emma Simpson's analysis here.

New supermarket opens in south Cumbria

A new supermarket has opened in Kendal.

Sainsbury's Kendal has been built on the former site of Kendal Rugby Club on Shap Road.

The retailer Argos, which is owned by Sainsbury's, has also moved into the new supermarket and closed its former store in the town's Westmorland Shopping Centre.

Sainsbury's says the supermarket has created 210 jobs for the local area.

Asda cuts petrol prices

Petrol station
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Oil prices might be rising but Asda is cutting the cost of petrol at the pumps.

The supermarket chain, which is in merger talks with Sainsbury's, said it is lowering the price of unleaded petrol by 2p to 126.7p per litre.

Is this the start of a supermarket petrol price war?

Watch this space.